Brad King: Homesteading program a 'new' tool to revitalize neighborhoods

As I have written in previous columns, Muncie has an abundance of troubled properties: abandoned, blighted and tax delinquent. I have proposed various ideas, such as land banking.

Last year, Mayor Dennis Tyler convened a task force to determine the best way to establish land banking under the current laws. About the same time, legislation was proposed at the state level that would make it easier for municipalities to form and operate land banks and augment the tax sale process to complement it.

The proposal stalled in the legislature and was moved over to an interim legislative committee. Unfortunately, the task force had been hoping the bill would pass but, with it stalling, it would have to wait for an outcome. That was, until a new tool already on the books and recently updated by the state was discovered.

In the 1980s both the city and the state enacted laws that would allow the creation of an urban homesteading program. Recently, a new code was enacted that gave an alternate path to setting up an urban homesteading program as well. With these newly discovered and newly passed laws, the task force was again brought together to determine the best way forward. I was asked to join the discussion in July and eagerly accepted.

Basically, the program would provide troubled properties from a tax sale, some of which would be what I call "handyman specials" at very low acquisition costs if the participants met certain criteria.

The city ordinance is more restrictive than the state code. It requires participants to be eligible for a Federal Housing Administration (FHA) backed mortgage; has available income for the loan; isn't related to anyone in the program or in city, county, or state governments; has a good credit score; pays more than 30 percent of income toward housing, and falls within 120 percent area median income (AMI).

Unfortunately, the ordinance omits community development organizations that would use the property for the same purpose: provide homeownership opportunity for low- to moderate-income families.

The state code allows the city's fiscal body to designate the agency that will administer the program. City ordinance specifically names the Board of Public Works and Safety (BPW) to administer the program. I think it can be easily argued that with the powers invested in it, the Muncie Redevelopment Commission could just as readily administer this program. Acquisition would be performed through the tax sale process except the deed would be attainable in a much shorter time.

Once the applicant meets the criteria and has shown to have either the financial capacity or the skill set required to rehabilitate the property, and been chosen to participate in the program, they still have several guidelines to meet. They must begin occupancy within six months of being awarded the property, but any repairs needed to bring the house up to minimum building and health codes must begin within the first 90 days. They then have a schedule of repairs to be completed within a time frame to bring the building to full building code. They also must reside in the house as their primary residence for five years.

All of that will be reviewed and must pass inspection. Any failure to meet these requirements will nullify the agreement and the property will revert back to the BPW; although the board may extend the period for compliance by two years.

This program is an opportunity to provide homeownership into target areas that need the stabilization. Urban homesteading can hasten the process of reallocating properties for rehabilitation. It is also far more affordable for the city in both the short term and long term than demolishing these properties. Properly marketed and branded, this program can also reinvigorate our sense of community.

Brad King is an archaeologist, community advocate and president of the Old West End Neighborhood Association.

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Brad King: Homesteading program a 'new' tool to revitalize neighborhoods

As I have written in previous columns, Muncie has an abundance of troubled properties: abandoned, blighted and tax delinquent. I have proposed various ideas, such as land banking.